Air India aims to stem losses by leasing out long-haul planes

New Delhi: Air India, the national carrier that is in line for a Rs5,000 crore government rescue, will lease out seven of its medium- and long-haul aircraft to improve asset utilization and increase revenues, according to a tender floated by the airline on 1 October.
The state-owned carrier, run by National Aviation Co. of India Ltd, lost around Rs7,200 crore in the last fiscal year after traffic dropped and business-class fliers migrated to other lower-cost options.
Air India and the country’s other full-service carriers are looking for ways to cut losses as fliers opt for low-fare airlines such as IndiGo and SpiceJet, which have made money as the Indian economy revives following last year’s slowdown and scares over swine flu outbreaks that have reined in overseas travel.
Air India, which is struggling with a debt of at least Rs16,000 crore and needs to pay for a multi-billion dollar aircraft order to replace its ageing fleet, will lease out three of its intercontinental Boeing 777-200LR planes, each costing in excess of $230 million (Rs1,092.5 crore now). The lease period will be at least two years starting in the middle of next year, according to a request for proposal posted by the carrier on its website.
05/10/09 Tarun Shukla/Live Mint

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Categories: NACIL Oct 2009